Quick Links

Search this Site

Search this Site

Subscribe

Sign up for an email newsletter that lets you know when a new Post has been made on Cobourg News Blog. It will be sent at 8:00 a.m. any day with a new post. Unsubscribe at any time. Name optional. Click here to subscribe.

CIVI getting close to approval

The single biggest program in Cobourg's Vitalization project is the Community Improvement Venture Initiative (CIVI); the Corporation that would manage it is abbreviated to CIVIC. The idea is to setup a “for-profit” corporation that would take positive steps to renovate downtown buildings and businesses. It would follow the recently approved Downtown Master Plan and work in conjunction with incentives made available via the Community Improvement Plan (CIP). At the C.O.W. meeting on March 14, the consultant will make a presentation and Wendy Gibson, Economic Development Officer will ask Council to approve in principle the related business plan and refer it to staff for preparation of an implementation report. This is one of the biggest decisions planned for this Council’s term.

The CIVI concept was first presented to Council July 6, 2015 with a report in this post - with 129 comments to date. Since then the Downtown Master Plan has been approved (details here - Final approval was Feb 29), the Heritage Master Plan is close to approval and the Community Improvement Plan has been prepared and will be approved in conjunction with the Downtown Master Plan.

The short version of what the CIVIC does is described by Wendy Gibson in her memo recommending approval:

The original concept of a Community Improvement Venture Initiative was pursued after reviewing the City of Winnipeg and the successful creation of their Centre Venture Development Corporation.

Cobourg's Downtown Vitalization Task Force felt this model should be explored as an option for the downtown vitalization study area (also encompassing the heritage district). It would operate as an arms-length agency of the Town and an advocate and catalyst for business investment, development and economic growth specific to the downtown. The concept would include the hiring of personnel, under the guidance of a private/public-sector board of directors, to develop and implement strategies and to identify and capitalize on economic, physical and social development opportunities in Cobourg's downtown.

The agency would be charged with fostering re-development of the downtown through strategic management, financial and other support. It would potentially expedite development in the downtown by promoting private-public cooperation and innovative partnerships. It would also encourage new retail business to capitalize on the new downtown vision as well as residential and commercial ventures. There would be a particular emphasis on the rejuvenation of heritage buildings and development of vacant or underutilized downtown properties.

A full time manager (Executive Director) would be hired to run the Corporation as an arms-length “for-profit” corporation. He/she would have an office located downtown.

There would be a board of “experts” appointed to give overall direction. This board would include the mayor as honorary chairman. The Executive Director and the board would not answer to Council on day to day operations but Council would specifically approve each grant/loan recommended by the Board. Council would also approve the Corporation (or not) and approve its annual budget.

The corporation would have a line of credit using the Town’s less-than-prime borrowing ability, and would lend out up to $10M over a period of years. (Loans would be over 3 to 10 years and repayments would start immediately so the maximum outstanding expected is around $10M.)

Legal advice said that the idea as proposed is legal in Ontario.

The Corporation’s cash flow projection (appendix 4 in the business plan) shows:

$350,000 contributed by the Town for each of the first three years – a total investment of $1.05M. There is a possibility that a contribution might be needed for up to five years.

Loans are expected to be made of about $540K in year one and $2.8M in years two and three. After that (or maybe in 5 years), it would be self-sufficient.

Salaries and benefits total $98K per year.

Including salaries and benefits, total annual expenses: $145K

Direct Return

The direct return: (tax revenue increase) is estimated at $262,000 (NPV) and interest $297,000 (NPV). This is nowhere near the $1.05M investment so CIVIC is only justified by Indirect Benefits.

Indirect Benefits

As noted in the earlier article, when the town invests, the experience of others shows that approx. three times the Town’s investment is made by private investors. This 3:1 leverage adds another $30M from private sources. That is, there would be more upgrades than just those done directly by CIVIC.

The consultant’s analysis is based on the experience of similar projects but its success depends on the skills of the Manager and the Board.

Wendy recommends that the plan be implemented. It was also recommended by the Downtown Vitalization Task Force and the Economic Development Advisory Committee. Note that these groups also recommended the approval of the Community Improvement Plan to provide additional tools (incentives) for Downtown revitalization. (Incentives are listed at the bottom of this article)

A big decision for Council - do we need CIVI as well as the Community Improvement Plan Incentives?